Form of Escrow Agreement

THIS ESCROW AGREEMENT, executed this ________ day of ____________, 2003, by CFB Banchares, Inc. (the "Corporation") and First Tennessee Bank (the "Escrow Agent").


W I T N E S S E T H:


WHEREAS, the Corporation is offering for sale a minimum of $5,000,000 and a maximum of $7,000,000 in shares of its common stock, $1.00 par value per share (the "Stock"); and


WHEREAS, the Corporation is desirous of entering into this Escrow Agreement with the Escrow Agent for the receipt and disposition of the subscription funds for the Stock of the Corporation.


NOW, THEREFORE, in consideration of the premises and mutual covenants and conditions contained herein, the parties hereby agree as follows:


1. Payment of Escrow Account. All payments for each share of Stock will be held by the Escrow Agent under this Escrow Agreement. The Corporation will hold the subscription agreements and a copy of the fully executed signature page of the Subscription Agreement showing the subscriber's name(s), social security number(s)/tax identification number, address, jurisdiction, capacity of ownership, and signature(s) of the subscriber(s). Immediately upon collection of payments for subscriptions, the Company will deliver the payments to the Escrow Agent. Escrow Agent shall deposit such payments in an account (the "Escrow Account") and invest and reinvest such funds in the permitted investments ("Permitted Investments") described below. The earnings thereon shall inure to the benefit of and be distributed to the Corporation or the subscribers as hereinafter provided, with any taxes to be reported on interest earned to the tax identification number of the Corporation. A Permitted Investment shall mean the following, and no other:


(i) certificates of deposit or time deposits constituting direct
obligations of any bank, which deposits are fully insured by the Federal
Deposit Insurance Corporation;


(ii) short-term bonds, notes, certificates of indebtedness, treasury bills,
or other securities constituting direct obligations of the United States of
America; or


(iii) overnight federal funds.


Any Permitted Investment shall be made only as permitted by law and for a period not longer than is specified by law or through the date in which the Escrow Agent, upon consultation with the Corporation, determines that the subscription amounts and all interest accrued thereon will be needed for the purposes for which such investment is held.


2. Disbursement of Escrow Account. The purpose of the Escrow Account is to hold the funds of the subscribers. Upon written notice by the bank regulatory authorities that the Peoples Bank of Scott County (the "Bank") is approved to commence operating as a bank


and the Corporation is approved to acquire the Bank, the Escrow Agent will deliver all amounts in the Escrow Account to the Corporation, less any fees due to Escrow Agent. If requests are made to make payments that are greater than the amount in the Escrow Account, notice of any deficiency will be given by the Escrow Agent to the Corporation, and the Escrow Agent will not make any payments until either the deficiency is eliminated or specific written instructions are received from the Corporation on paying out the remaining funds. After the initial distribution to the Corporation, subsequent subscriptions may be paid directly to the Corporation.


3. Termination of Escrow Agreement; Extension of Escrow Agreement. This Escrow Agreement shall terminate on the earlier of the date that all funds held in the Escrow Account are disbursed under the terms of Item 2 of this Esc ...